2011 Annual Results Presentation

March 2012 Disclaimer and Forward Looking Statements

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2 Presentation Outline

I. Business Overview

II. Financial Highlights

III Future Plan and Strategy

IV. Q&A Session

V. Appendix

3 Business Overview

4 Company Structure

 Physical metals trading Precious service Metals  Commission based Wholesale  Generated 25% of total revenue for 2011

Jewellery Retail Chow Sang Sang Group

 8 HK offices and Internet Securities platform Brokerage  Commission based  Main business segment  No proprietary trading  More than 300 self-operated  Generated 0.3% of total stores in Greater China revenue for 2011  Operates under “Chow Sang Sang" and “Emphasis Jewellery”  Investment Properties Other  Generated 74% of total  Investments Shares of HKEX revenue for 2011  Generated 0.7% of total revenue for 2011

5 Business Overview: Jewellery Segment

6 Product mix: Jewellery

Gold based Items

Gem-set Items

Licensed Products (Hello Kitty)

International Brands (Gucci, Rolex, Tudor, Versace)

7 Distribution Network

 Complementing the extensive retail network, the eshop.chowsangsang.com offers an online shopping service Beijing Surrounding  Chow Sang Sang directly runs and controls all Provinces of its retail stores with no franchise operations (34) Heilongjiang Beijing Flagship Store

Inner Mongolia Jilin

Xinjiang Beijing Liaoning

Tianjin Shanghai Flagship Store Gansu Hebei Ningxia Shanxi Qinghai Shandong Eastern Northern Shaanxi Jiangsu Henan (41) (70) Anhui Tibet Hubei Shanghai Chongqing Sichuan Zhejiang Hunan Jiangxi Guizhou

Kunming Flagship Store Guangdong Chow Empasis Yunnan Guangxi Sang Sang Jewellery Flagship Stores Hong Kong China(1) 232(2) –

Hainan HK / Macau 44 12

Taiwan - 22 (1) as at Dec 31, 2011 Covered cities Southern (87) (1) Excluding Hong Kong and Macau (2) Reached 237 as of March 27, 2012 8 Focus on Strong Growth in Mainland China

Increasing No. of Stores in Mainland China

(No. of Stores)

New shops +43

Same-store Sales 14% 23% 37% Growth

9 Financial Highlights

10 Improving Operating Performance …

Turnover Gross Profit

(HK$ mm) (HK$ mm)

1H 2H

11 Improving Operating Performance (Cont’d) …

Operating Profit Profit attributable to equity holders

(HK$ mm) (HK$ mm)

(1) Total group net profit 12 …Driven by Retail Segment…

Revenue Breakdown Results Breakdown

13 …with High Growth …

Retail – Revenue Retail – Operating Results

(HK$ mm) (HK$ mm)

1H 2H

14 …and Robust Demand from PRC Consumers

2009 2010 2011

Sales Attributable +4% +6% to PRC 56% 60% 66% Customers(1)

Mainland customers’ contribution continues to increase

(1) China sales + HK/Macau sales by PRC customers 15 Consolidated Sales Mix – (Retail)

2010 2011

Watches 5%

Non gold jewellery Gold 34% 61%

Gross margin: Gold : 11%-13% Non gold jewellery: 40%-42% Watches: 24%-26% 16 Consolidated Gross Profit Contribution – (Retail)

2010 2011

17 Change of Average Selling Price

Hong Kong/Macau - Gold Hong Kong/Macau - Jewellery

(HK$) (HK$)

China - Gold China - Jewellery

(RMB) (RMB)

18 Stable Working Capital Trends

Average Inventory Turnover Days Average Receivables Turnover Days

(No. of Days) (No. of Days)

Average Payables Turnover Days Cash Conversion Cycle

(No. of Days) (No. of Days)

* Restated. 19 Financial Highlights

For the 12 months ended % (HK$ million) or as at Dec 31, change 2009 2010 2011 10 vs 11 Turnover 9,463 11,705 17,158 46.6% Jewellery Retail 5,923 8,265 12,645 53.0% Other businesses 3,540 3,440 4,513 31.2% Gross profit 1,887 2,302 3,254 41.4% Operating profit 790 995 1,466 47.3% EBITDA 873 1,097 1,573 43.4% Profit attributable to equity holders 574 757 1,094 44.5% EPS (HK cents) 95.4 116.2 161.5 39.0% Dividend per share (HK cents) 33.0 43.0 60.0 39.5%

20 Other Financial Information

For the 12 months ended (HK$ million) or as at Dec 31 2009 2010 2011 Cash and cash equivalents 379 273 631 Available-for-sale investments1 705 889 635 Capital expenditure 135 109 190 Gearing2 22.5% 19.7% 33.3% Unused banking facilities 1,566 1,689 2,663

1 Available-for-sale investments mainly represents HKEX shares which valued at quoted market prices

2 Total borrowings to total equity holders’ equity. Total borrowings includes interest-bearing bank borrowings, bullion loans and interest-bearing bank borrowings arising from securities and futures broking.

21 Future Plan and Strategy

22 Expansion with Distinctiveness in PRC

50 new stores per year in PRC

Capitalize on Existing Self-Run Store Model Expansion Philosophy Presence

 Large potential for growth:  Ensure consistent and  Target mid-high end consumers smaller store count compared to superior service quality  Brand development and fine- competitors  Leverage on high-end tuning is more important than  Selective shop positioning and shopping malls and growth in the number of stores careful geographic spacing to department stores’ own maximize efficiency & exposure positioning to enhance image but avoid overconcentration of  More flagship and premium- stores status stores

23 Product Mix and Branding

Jewellery Focus and Product Differentiation Marketing Initiatives

 Clear presence and visibility of international Continue with existing programs with focus: brands  Capitalize on CRM database  Collaboration with international brands for  unique products Expand e-Shop, synergizing with physical stores  Leverage on licensed products such as Hello  Revamp VM at stores Kitty and Disneyland characters  Develop house brands - focus on quality and sophistication

24 Improving Operating Efficiency

initiatives for sustainable growth

 Build human capital

o Implement training programs to nurture and develop middle management staff in PRC Incentive schemes to attract and motivate sales staff o  Enhance inventory efficiency strengthen the logistical network with supply hubs to facilitate “just-in-time” delivery o  Invest in new plant with focus on R&D for quality enhancement and production efficiency

25 Q&A Session

26 Appendix

27 Company History

1930-1970 1970-1980 1980-1990 1990-2000 2000-2011

1934 1973 1998 2005 2006 2009 2011

Chow Sang First Re-entered Became Launch Opened the -Accelerated Sang company in the Mainland sightholder of brand first growth in Goldsmith the industry China market Diamond revamp Flagship China established listed on Trading campaign Store in in Hong Kong Company Beijing -Opened the Guangdong Stock first Flagship Exchange Store in Taiwan

No. of 9 310 Stores

Turnover 130 17,158 (HK$ mm)

28 Industry Analysis – China Luxury Market Overview

Market Ranking by Country 600 35%

30% 500 CAGR: 9.5% 25%

400

20% 300 15%

Value (RMB Billions) 200 10%

100 5%

- 0% USA Japan Greater France Italy China Great Germany South Russia Hong China Britian Korea Kong

Value Growth Source: 2011 World Luxury Association Official Report

 As of the end of December 2011, the total annual Continued Strong Growth into 2012: consumption of China's luxury market has reached $ 12.6 billion, occupy 28% of global share 25% - 30% estimated growth rate for Chinese luxury goods market in 2012  China has become the world's largest share of the luxury consumer countries. Source: Bain & Company Luxury Industry Overview 2011 29 Industry Analysis – HK & PRC

2011 HK Jewellery, watches and clocks, and valuable gifts Sales 10 9.49 Revenue generated from Chow Sang Sang jewellery sales 9 7.9 7.87 7.61 7.81 7.75 in HK grew 48% in 2011, beating the total Jewellery, 8 7.3 6.76 6.91 6.92 watches and clocks, and valuable gifts sales growth in HK of 7 6.45 6.6

46.6% 6 5 2011 PRC Gold, Silver and Jewellery Sales

HK$ billion 4 20 3 17.63 18 18 17.17 2 16.06 16 15.2 14.99 15.23 1 14.46 14.24 13.79 13.54 14 13.15

0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12 Source: HK Census & Statistics 10 8 RMB billion 6 Growth rate of retail sales for jewellery products in 4 China stood at 42.1% for 2011, whereas the growth 2 in retail revenue from Chow Sang Sang’s China 0 operations hit 64% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: National Bureau of Statistics of China

30 Industry Analysis – China Jewellery & Watches Overview

China jewellery & watches China jewellery & watches market value 2007–2011 market value forecast 2011–2016

80,000 CAGR: 11.2% 74,471 CAGR: 11.0% 70,000 67,454 60,952 60,000 54,476 48,914 50,000 43,830

40,000

30,000

20,000 Amount of Consumption (USD million) (USD of Consumption Amount

10,000

0 2011 2012 2013 2014 2015 2016 Source: MARKETLINE Source: MARKETLINE Strong Growth in the past 5 years: Continued Strong Growth into 2016:

China jewellery & watches market value experienced CAGR 11.2% estimated growth rate for China jewellery & CAGR 11.0% strong growth rate from 2007 to 2011. watches market value from 2011 to 2016. The total value The total value increased from USD 28,869.8 will increase from USD 43,829.5 million (2011) to USD million(2007) to USD 43,829.5 million(2011). 74,470.5 million (2016)

31 Branding Campaign– A Lifetime of Joy Launched in Greater China in Apr 2011

Image TV Campaign to build aspirational brand image Rolled out new TV image campaign in H1 in Greater China with marketing investment of over HK$50M. A media mix of national TV channels, including CCTV covering China nationwide and popular internet and social media deployed to gain national coverage and broaden consumer awareness and appeal.

32 International Brands Strategic Partnership

 Maintained strong partnerships with 16 distinctive international jewellery brands from Europe and Japan.  Acquired the exclusive distribution rights of Gucci Jewellery in HK, Taiwan and Macau.  Official agent of Rolex and Tudor in Hong Kong and Mainland China. A total of 25 POS as of today.

33 Enhancement in Product Portfolio

 Strengthen product R&D to further the development of in-house brands and gold gifting. Product collections included La Pelle Pearl, Yú Yú signature diamond product line and fine jewellery development of Jade, semi-precious stones and carat plus diamonds to capture the high end sector. Product campaign supported by marketing communication and VIP roadshows in tier one cities in China.  Internet business expansion plan. Strategic alliance with influential internet portal including Tao Bao- Tmall, 360buy.com, amazon.com

34 2011 New and Strategic Stores Set up

Flagship Store, Flagship Store, Hong Kong Taiwan

Xiamen, China Chongqing, China Macau 35 Highly Recognized Brand Name

over100awards Attained in the past 7 years in areas of Service, Management, Quality, Design & Branding

36